LA independent oilman believes thieves pull out his oil

May 06, 2001 02:00 AM

Under the paint, the grime, the oil and the years, Philip McAlmond -- the independent oilman operating for nearly two
decades on the hill overlooking the Belmont Learning Centre -- smiles as sweetly as ever. There are riches under
here, McAlmond, 72, said recently as he surveyed 10 oil pumps and three storage tanks at his 1596 Rockwood St.
compound enclosed by razor wire-capped fences and under round-the-clock surveillance by four video cameras mounted on
a 45-foot pole.
The problem is that "thieves" are getting most of it, sucking tens of millions of dollars worth of oil out of his
tanks through a break in the sewer, says McAlmond, who lives in Sherman Oaks. "It's an absolute nightmare," McAlmond
said, pointing to a 4-foot-high tangle of pipes and valves splattered with oil and paint, the remnants, he says, of
his efforts to safeguard his investment. "I can't afford to let it go. This is everything I've worked for all my
life."
McAlmond was unable to provide documents to back up an elaborate theory that a cabal of thieves -- including, he
believes, top-ranking city officials -- have broken into the sewer line that catches the water from his tanks, and
using powerful vacuum tubes have pulled out his oil and run it through a rogue pipeline to a hidden storage tank
nearby.

McAlmond is one of two companies still pumping oil from the Los Angeles Oil Field, once covered with dozens of rigs,
but now replaced with homes, businesses and the unfinished $ 175 mm Belmont Learning Centre. As the debate continues
on whether the nation's costliest school should ever be opened because of the danger posed by toxic gases leaking
from oil fields, McAlmond has a key role to play.
Regulators warn that if the wells are shut down, the field could repressurize, sending potentially explosive methane
or deadly hydrogen sulphide into the school and other buildings, or even oil to the surface. About 100 feet away from
McAlmond's operation, regulators still are grappling with how to plug an oil well under anapartment complex owned by
Mario Flores. The methane and hydrogen sulphide levels got so high the Flores family and their tenants were
evacuated.
Over nearly two decades, regulators have listened to and dismissed McAlmond's claims as technically impossible. "It's
extremely unlikely someone is going after his oil," said Richard Baker, district deputy with the California Division
of Oil, Gas and Thermal Resources, though to be 100 % certain would probably require tearing up the street.

McAlmond has been a fixture at the Los Angeles Police Department's Rampart Division since the mid-1980s, too. At one
point, his repeated claims were all sent to a particular investigator in the division's mental evaluation unit, said
Detective Fred Faustino, who worked on McAlmond's claims for years.
"Our professional people feel he's sane, so when he makes reports, we're compelled to do some kind of investigation,"
said Faustino, who, like most, views McAlmond as a "pleasant guy." Indeed, he said, the city has spent thousands of
dollars responding to McAlmond -- without ever verifying his allegations.
"Since the '80s, there have been several extensive investigations by the LAPD and by city engineers, but everything
comes back to disproving the allegations of theft," Faustino said. "He has all these theories and ideas how the theft
occurs, but there's never been proof of it. He's a chronic complainer on this."
More recently, the city's Department of Water and Power tried once again to investigate McAlmond's claims of the
secret pipeline, but found no evidence of one, said DWP spokeswoman Darlene Battle. And the district attorney's
office, which is conducting a criminal investigation at the environmentally plagued Belmont Learning Centre, recently
sent an investigator to interview McAlmond.

His son, Phil McAlmond Jr., is a pastor in Omak, Washington and declined to discuss his father in detail, saying we
"want to keep it in the family." Regarding the oil operation, McAlmond Jr. said, "I think my father is more than able
to explain and defend his situation and how he sees it." But while investigators have dismissed McAlmond's
allegations, they can't dismiss him.
That's because McAlmond runs 10 of the 58 wells operating in the Los Angeles Oil Field, and keeping them operating is
important to ensure the shallow oil field that runs under the unfinished Belmont Learning Centre about a quarter mile
away doesn't repressurize.
In January 2000, Los Angeles Unified School District board members in voted to abandon the school, but new
Superintendent Roy Romer later persuaded the board to consider private bids to complete what has become the nation's
most expensive high school and to include a system to guarantee potentially explosive methane and deadly hydrogen
sulphide gases won't get into the buildings.
State regulators have repeatedly warned that stopping production of the wells in the area could send crude oil to the
surface, threatening homes and businesses. McAlmond's unorthodox efforts to "protect" his oil have included elaborate
valves, and mazes of pipes painted bright red, yellow, blue and white, in addition to a complex surveillance system.

Regulators say the devices intended to prevent sabotage may have been the cause of a recent, highly unusual citation
and $ 6,000 fine from the California Division of Oil, Gas and Geothermal Resources after inspectors found untreated
water pouring from McAlmond's oil operation into the street and storm drain Feb. 15, rather than into the sewer as
his permit requires. McAlmond has appealed the fine. The city's Stormwater Management Division also issued McAlmond a
notice to comply.
While the unknown quantity of water that flowed down the street was probably fairly uncontaminated by oil -- samples
have not yet been analysed -- there's concern some oil may have gotten into the ground, or the ocean. After McAlmond
claimed the water backed up, because his lines were tampered with, a state inspector in a Feb. 28 report concluded,
"the plug actually appeared to be a combination of mud, tank sediment and gravel that was probably inadvertently
placed there by Mr. McAlmond himself."
Baker said until recently McAlmond's operated within division guidelines. He's just been viewed as "unique," he said.

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